Loading subjects
Market structures and marginal analysis · Part 3 of 4
6 exam-style questions with model answers, plus 6 quick multi-choice questions — every question on this part of the standard, grouped by the 2 pages of notes they come from.
Write a full answer before you reveal the model one. That comparison is where the learning happens.
Explain how a monopoly determines its profit maximising price, referring to the marginal revenue, marginal cost and average revenue curves.
Explain in detail why a monopoly's short run price, output and profit are the same as in the long run, referring to the characteristics of a monopoly.
Demand increases for a monopoly.
Using marginal analysis, explain the impact on the monopoly's output, price and profit, and compare and contrast this with what would happen to a perfectly competitive firm facing an increase in market demand. Refer to cost and revenue models in your answer.
Explain why a monopoly is not allocatively efficient.
Explain in detail where the deadweight loss caused by a monopoly is located on the cost and revenue model, and why those units are not produced.
Compare and contrast the efficiency of a monopoly and a perfectly competitive market, assuming both have the same cost curves. Refer to cost and revenue models in your answer.